Recall that a standard CGL (Commercial General Liability) form policy has five sections: (1) Coverages and Exclusions; (2) Who is an Insured; (3) Limits of Insurance; (4) Conditions; and (5) Definitions. Our last post discussed the Coverages and Exclusions section; this post explores the “Who is an Insured” section.
To determine who is an “insured” under a CGL policy, first look at the Declarations page. That page will list the named insured, which will be one of the following:
- An Individual. If that is the case, a spouse also will be an insured with respect to the conduct of a business solely owned by that individual.
- A Corporation. If the named insured is a corporation, its officers and directors will also be “insureds” with respect to their duties as officers and directors, and shareholders will be insureds with respect to their liability as shareholders.
- An LLC. In this case, the LLC’s members and managers will also be “insureds” with respect to the conduct of the business and the manager’s duties.
- A Partnership or Joint Venture. “Insureds” will also include members, partners and spouses, but only with respect to the conduct of the business.
Volunteer workers and employees other than officers or managers are also covered under a standard CGL policy, but only for acts within the scope of their employment or while performing duties related to the conduct of the business.
Lastly, an organization that you newly form or acquire, and which you own or have a majority interest in, other than a partnership, joint venture or LLC, will also qualify as an insured if there is no other similar insurance available to that organization, for 90 days or to the end of the policy period, whichever is earlier.
The take away is that the “insured” under a CGL policy includes not only the named insured on the Declarations page, but also several others, so long as they are engaged in conduct that is related to the named insured’s business.
Who is an “Additional Insured” is a separate topic and will be covered in a separate post, but you should note that a CGL policy may include a clause or an endorsement that extends coverage to parties who are not named insureds or otherwise covered by the policy. For example, in the construction context we often see the subcontractors having the general contractor named as an additional insured via endorsements to the subcontractor’s CGL policy.